Leaders of some of the largest US companies, unshaken by predictions of recession, said the economy will recover from the worst terrorist attacks in history. A few said business may even increase.
"You just sense there is going to be this wave of patriotism," said Herbert Baum, chief executive of the Scottsdale, Arizona-based soap maker Dial Corp. "Consumer confidence is going to be strong." CEOs like Baum remain optimistic even amid this week's snarled shipments and canceled conferences, vowing that terrorism won't halt the economy.
Aware of many analysts' pessimistic views, they're trying to avoid making the talk self-fulfilling. William J. Nutt, who heads a Boston asset-management firm, said he plans to buy stock for his personal account when financial markets reopen on Monday.
"I think it is simply the right thing to do, and so whether I make money or lose money, I don't care," said Nutt, 56, chief executive of Affiliated Managers Group Inc.
Two hijacked commercial jetliners toppled the 110-story twin towers of the World Trade Center in New York and another crashed into the Pentagon in Virginia, shutting down air travel nationwide and disrupting shipments of everything from books to personal-computer parts.
Many business leaders, angry at the attacks and the idea that they may precipitate a recession, are trying to reinforce an impression of business as usual. Cisco Systems Inc Chief Executive John Chambers, expressing "tremendous confidence in the financial systems of our country," said the computer-networking company will buy back as much as US$3 billion in stock over two years.
Lucent Technologies Inc Chairman and Chief Executive Henry Schacht told employees in an e-mail that customers are already asking for products to restore damaged services. Charles Holliday, the CEO of DuPont Co, said disruptions of shipments were easing and he expected continuing demand for the chemical maker's products. Dial's Baum predicted earnings this year could be "even a little stronger" than its earlier forecast of US$0.74 a share.
Robert Taylor Jr, chairman and chief executive of Focal Communications Corp, said he'll be on the first flight from Chicago to New York today. "It's important that I personally demonstrate, and that we as a company demonstrate, this is not going to stop us," he said.
Some CEOs expect help from the US Federal Reserve. Further interest-rate cuts are likely in response to fears over declining consumer spending, said Dick Syron, chairman of the instrument maker Thermo Electron Corp and former head of the Federal Reserve Bank of Boston.
Analysts agree that many industries may emerge unscathed.
Defense companies such as Lockheed Martin Corp and Raytheon Co are likely to get full funding for their programs. Construction companies, waste haulers like Waste Management Inc and others will participate in a clean-up likely to cost billions. Makers of security and weapon-detection equipment such as Tyco International Ltd and OSI Systems Inc could also get a boost.
"You know -- you hate to talk business at a time like this -- we have a lot of security products available to airports, but funding has always been an issue," said Dennis Kozlowski, Tyco's chief executive. "Funding may be freed up."
Abbott Laboratories Chief Executive Miles White was equally bullish. "Our country is strong, our company is strong and we at Abbott expect no change in our performance," he said. "We think it's important that these realities guide investors' response when the trading on the US stock exchange resumes." Many analysts fear the worst.
Stores closed across the US on Tuesday and, with consumers in no mood to spend, sales growth for September could be half that of earlier forecasts, said Bank of Tokyo-Mitsubishi Ltd economist Mike Niemira.
Insurers face record claims that may reach US$30 billion. US airlines may rival their record US$4.9 billion loss of 1992 and declining travel could affect hotels, theme parks and other leisure companies.
Thomson Financial/First Call, a Boston-based research firm, said US companies' fourth-quarter profit may decline 10 to 15 percent, as much as three times worse than it expected. Consumer confidence was at an 8 1/2-year low even before the attacks.
"It's going to take more than a glimmer before people start gearing up their factories again," said Robert Tieken, chief financial officer at Goodyear Tire & Rubber Co, North America's largest tiremaker. "Many people, not unlike ourselves, are bringing their inventories down, reducing their investments, basically in a batten-down-the-hatch strategy." Retailers expect a quiet weekend. Gucci Group NV canceled this week's grand opening of an Yves Saint Laurent store in Manhattan. Neiman Marcus Group Inc postponed a grand opening celebration this week in Florida.
For the optimists, there was one good sign: Wal-Mart Stores Inc and other retailers said they're running out of US flags.